- May 17, 2024
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The Palm Coast city government is fining Waste Pro $903,250 for gathering up 7,226 recycling bins when its contract ended in May. The city has withheld its final, almost $1.15 million payment to the waste hauling company amid the dispute.
The Palm Coast government says the recycle bins belong to residents, and that Waste Pro should have left them for locals to use when the city's new waste-hauling company, FCC Environmental, took over on June 1. Waste Pro says the bins belong to Waste Pro. Both cite sections of official city documents like contracts or RFPs to support their case.
A lawyer representing Waste Pro called the fine "arbitrary and capricious" in a June 23 protest of the $903,250 assessment, writing that Waste Pro would fight to recover attorneys' fees if the city government takes the case to court.
In a June 23 email to City Council members, the attorney, Amy Shay of Stovash, Case, Shay & Pearce, P.A., wrote that the city had also told Waste Pro that the city government was withholding its final, $1,147,706.94 payment to Waste Pro.
"Given its long-standing partnership with the City, Waste Pro previously offered to engage in pre-litigation mediation," Shay wrote. "This option becomes less attractive in Waste Pro’s eyes when it faces an illegitimate assessment of nearly $1 million and withholding of its final payment for services rendered to the residents of the City."
Palm Coast Communications & Marketing Director Brittany Kershaw confirmed that the city has not issued Waste Pro's final payment.
"We notified them that we are going to withhold the liquidated damages, and that gives them a 10-day period to dispute," she said.
The 10-day period ended June 23, the date on which Shay submitted Waste Pro's protest. The city is now evaluating it, Kershaw said.
Waste Pro was the city's waste hauler for 17 years until FCC won a bid in 2022.
Waste Pro started collecting the recycle bins, which bear its logo, on May 25.
The city holds that because a recycling bin is defined in Waste Pro's contract as “purchased on behalf” of city residents, the bins are the residents,' not the company's, according to City Attorney Neysa Borkert.
City Manager Denise Bevan notified Waste Pro of NE Florida Regional VP Brian Wintjen on June 9 the city expected to withhold $906,400 from its final, May 2023 payment to Waste Pro — $903,250 for the bins, plus a total of $3,150 for a handful of other alleged infractions, according to a document included in Waste Pro's formal protest of the city's assessment.
The $903,250 assessment, according to the notice, was due to Waste Pro's "failure to handle waste receptacles carefully, thoroughly empty and return containers or garbage receptacles to original location as per contract."
A Waste Pro division manager asked Palm Coast Citizen Engagement Analyst Alyssa Roscoe in a March 22 email to point out where the city's contract with Waste Pro said that the city "owned" the bins.
Roscoe replied, "I am not able to find anything stating ‘ownership’. However in the definitions, section 6.29 and then on page 12 section 3.2, both pictured below, the bins are discussed."
Roscoe attached photos of those portions of the contract: 6.29 defines a "plastic recycle container" as "any container purchased and distributed by or on behalf of City residents, by the Contractor for the intended use as a receptacle of recyclable items," while 3.2 states, "Recycling containers shall be provided to residents at no cost to the resident."
In its protest of the assessment, Waste Pro included a photo of Roscoe's email, with the line "I am not able to find anything stating ‘ownership'" highlighted in yellow.
Waste Pro pointed to text in several city documents to support its case, including a Q&A addendum to the city's 2011 Request For Proposals. It highlighted the following two questions:
"Question: Does the contractor need to purchase the recycle bins/toters? Answer: Yes, and the contractor shall retain ownership of all bins/toters/carts. (the cost should be included in the price proposal).
"Question: Will the current hauler retain ownership of the current recycle bins? Answer: Yes."
At a June 27 City Council meeting, the council authorized Palm Coast’s legal team to enter negotiations with Waste Pro over the assessment.
